Company Focus: Getting Back The Vision

Company Focus

June 02, 1996|By KEN BAKER Daily Press

NEWPORT NEWS — A shattered flat-screen computer monitor sits on a table in the lobby of nVIEW Corp.'s Oyster Point headquarters.

Even though the busted glass panel is an nVIEW product, the company proudly displays the battered screen, the actual movie prop Sylvester Stallone fired bullets into in the 1993 futuristic thriller "Demolition Man."

FOR THE RECORD - Published correction ran Friday, June 7, 1996.An article in Sunday's Business section incorrectly said that new nVIEW Chairman Angelo Guastaferro fired two vice presidents as part of a company restructuring. An nVIEW spokesman said that the executives resigned - one for a better job, the other for personal reasons - and that the company decided not to fill the positions.

The product's cameo appearance may have won nVIEW a film credit in late 1993, but judging from the company's performance since Stallone's big-screen wallop of nVIEW's little screen, the company might as well have been dealt an uppercut from Rocky Balboa, a machine-gun barrage from Rambo, a ... you get the picture.

Of course, the movie scene didn't cause nVIEW to subsequently report five consecutive quarterly losses, fire its top executives, reduce its work force and see its stock value Ping-Pong into and out of Wall Street's basement.

But earlier this year, with the 9-year-old image projector manufacturer on the ropes, nVIEW's board did decide to hire the corporate version of Mr. T in a late-round attempt to pull the struggling high-tech firm out of the red.

In January, the board, including company founder and chief technology officer James H. Vogeley, installed a gung-ho CEO with a record of success and a nickname typical of whip-'em-into-shape boxing managers: Angelo "Gus" Guastaferro.

Since becoming chairman and chief executive officer, the 63-year-old former NASA Langley executive has cut nVIEW's operating expenses by 40 percent and sharpened the formerly flabby firm's unfocused approach to its core business, making high-end image projection and display products for multimedia boardroom and classroom presentations.

The changes, Guastaferro predicts, steered nVIEW into profitability for the second quarter.

If the next earnings report, due out in a few weeks, proves him right, it will be the first time the 90-employee company, which went public in 1991, has turned a profit since the fourth quarter of 1994.

"I'm here to get the company on an even keel," Guastaferro said last week in an interview with the Daily Press. "We lost the recipe. We forgot how to make money."

Guastaferro's fix-it plan grew from meetings with company employees and the suggestions of a six-member "vision team," made up of the firm's highest-ranking executives.

Inflated executive salaries, overspending on product development, a series of product defects and several top-management changes (including his replacement of CEO Robert Hoke) had lowered employee morale and troubled investors, Guastaferro says.

The hands-on leader recalls that when he arrived, one of the first things that struck him was the dramatic difference between the nVIEW of 1991 and the nVIEW of 1995. He didn't like what he saw.

In 1991, the company had sales of $16 million, operating expenses of $4 million and a profit of $1.3 million. In 1995, despite a doubling of sales to nearly $33 million, the company lost more than $7 million.

One of the biggest problems, Guastaferro notes, was that nVIEW's operating expenses last year - $14 million - would have shocked an average MBA student.

So he cut the work force by 10 percent, streamlined assembly and distribution processes and fired two high-paid vice presidents, thus transforming the firm's leadership into a "leaner, more aggressive management."

"I took the top of the organization and skinned it down," Guastaferro says. "I'm working the team pretty damn hard right now. But it will pay off."

Guastaferro says his goal is to not only get nVIEW back to the financial health it enjoyed in 1991, but to grow the company to a $200 million-a-year industry leader within the next three to five years.

"I would feel myself a failure if I just stopped the bleeding," says Guastaferro, whom nVIEW lured from Lockheed Martin with an annual base salary of $160,000 and stock options of $25,000.

nVIEW, once the Peninsula's high-tech darling of Wall Street investors, began stumbling shortly after its engineer-founder Vogeley took the company public in 1991.

Vogeley started tinkering with liquid crystal display technology out of the basement of his parent's Yorktown home in 1986. Within a few years the maker of black-and-white liquid crystal display products for overhead projectors boasted more than $4 million in annual sales.

The firm expanded its products to include technicolor video and image projectors that were, at the time, made up of leading-edge technology that impressed Wall Street investors.

Eight months after it went public, the value of nVIEW stock had skyrocketed to $31.50 a share as the fledgling company beat the pants off competitors, quadrupling its sales that year to $16.8 million.